David Larcker and Brian Tayan explain why building trust in an organization pays off
The litany of prominent corporate failures in the last decade — Enron, WorldCom, Lehman Brothers, and so on — ushered in an increase in regulatory requirements for corporate governance. The result is that every year, companies spend tens of millions of dollars on incentive compensation, director salaries, audit fees, internal auditors, and compliance efforts to satisfy a long list of rules, regulations, and procedures imposed by legislators and the market.
This piece originally appeared in Stanford Business Insights from Stanford Graduate School of Business. To receive business ideas and insights from Stanford GSB click here: (To sign up: https://www.gsb.stanford.edu/insights/about/emails)